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How to get more customers: Introduction to customer acquisition strategies

23 min read

Customer acquisition is one of the most fundamental aspects of running a business. Whether you're an established enterprise, a promising startup, or anything in between, finding and engaging paying customers is how you survive.

However, you can't acquire new customers at any cost, meaning you must still pay attention to concepts like customer acquisition cost (CAC) to ensure your efforts to win customers is profitable.

Whatever your business model, target group, and sales channel, you're sure to find tips on this blog for planning your customer acquisition strategy, finding the right mix to support your customer acquisition efforts, and how to ensure the hard-won customers stay with you in the long term.

Introduction to customer acquisition

Customer acquisition is an essential aspect of any business, as it is necessary to continually attract new customers to sustain growth and profitability. Acquiring new customers involves various marketing strategies and tactics that aim to build interest and desire for a company's products or services.

What is the customer acquisition process?

Customer acquisition in marketing refers to the process of identifying and attracting new customers to a business or product. You need to acquire customers if you want to generate new revenue. Strong customer acquisition strategies consider things like where to find potential customers, how to educate them about a product or service, and, eventually, how to persuade them to make a purchase.

However, it is important to remember that customer acquisition represents only a small part of the overall customer relationship. It's equally important to think about how to keep your existing customers happy and keep them coming back again and again. Tying your customer acquisition strategies coherently with your customer retention strategies is a commonly known recipe for building successful businesses.

Blue and White Funnel Chart Presentation (2)

What is the purpose of customer acquisition?

At its most simple level, customer acquisition refers to an organization's attempts to bring new customers to its business. However, it's about more than just grabbing sheer numbers. Customer acquisition involves various techniques and approaches that help connect your business with the right people who can deliver maximum value for your company.

Finding a winning customer acquisition strategy is about unlocking a repeatable, scalable method to bring in new customers. It can involve a mix of strategies, channels, and approaches; each focused on delivering a predictable impact over the long haul.

What is the relationship between customer acquisition and marketing?

Customer acquisition and marketing are related concepts, but they are not the same. Marketing is a broader term that encompasses a wide range of activities, strategies, and tactics aimed at promoting a product, service, or brand, building brand awareness, and creating a favorable image in the minds of potential and existing customers.

Customer acquisition, on the other hand, is a specific area within marketing that focuses on attracting new customers to a business or product.

As you might have noticed, customer acquisition has a lot of crossover with marketing. And yes, the two have a lot in common. It is definitely one of the primary goals of marketing, but marketing also covers other aspects such as customer retention, brand building, and market research.

In other words, customer acquisition is a subset of marketing, and the two concepts are closely intertwined. Marketing strategies and tactics often serve to support customer acquisition efforts by creating awareness, generating interest, and ultimately driving conversions.

Why is customer acquisition important?

For various reasons, customer acquisition should be at the top of any business's agenda. It helps to get a stronghold in a market, expand the customer base, and ultimately drive the sales and revenues that are the lifeblood of an organization.

The other important thing to consider is that no matter what you do, some customer attrition is inevitable. There are many reasons why customer journeys end. Customer preferences might change, your competitors may introduce better value options, the economic downturn may discourage consumers from spending money, or something else.

When you combine all these reasons, it's easy to understand that you can't count on your existing customer base eternally, which is why you need to continuously refresh your customer base. Or, if you have growth or scale ambitions — and let's face it, who doesn't — you need to acquire new customers anyway.

How to calculate your customer acquisition cost (CAC)

Customer acquisition costs are one of the most critical metrics for quantifying the totality of your sales and marketing efforts.

Calculating customer acquisition cost is quite straightforward:

CAC = (sales and marketing costs)/(# of new customers acquired)

For example, let's say you spend $5000 on content marketing and PPC and win 20 new customers in one month. Then, you will calculate your CAC as 5000/20 = 250.

Customer acquisition costs need to be put in context with other metrics, like customer lifetime value (CLV), payback period, and retention rates.

If you spend $250 grabbing a subscriber and your flat fee is around $25, you need to hang on to their business for over ten months before making a profit.

Additionally, customer acquisition costs have gone up over the last few years. Old favorites like Facebook Ads were hit by Apple ATT, meaning digital marketing has become less precise. Add in the saturation of digital ads by huge brands with monster budgets, and the customer acquisition process has become more challenging.

But don't worry; your customer acquisition efforts don't have to be in vain. If you want to grab new users, it's still possible. Below, we'll list some customer acquisition strategies that still work in 2023 and beyond.

Depending on your target audience, there are enough options to get your business up and running.

Creating a customer acquisition strategy step by step

A good customer acquisition strategy isn't something you'll just stumble upon. You need to work hard to research your targets to get a good product-market fit. 

Here is a step-by-step guide to creating a customer acquisition strategy.

Customer acquisition starts with your product

Product market fit happens when there is a strong alignment between your buyers and your product and service. In short, it requires understanding their needs and pain points and adequately solving them.

You need to design your product with a market in mind. If you want to hit a home run, you can't make something and retroactively find a hypothetical audience.

So start by defining your target audience.

Define your target audience

To solve someone's problems, you need to know who they are. Clearly define your target audience, taking into account factors such as demographics, interests, behavior, and needs. This will help you create tailored marketing messages that resonate with your audience. Start by answering questions like:

  • What are your ideal customers trying to achieve with your product or service?

  • What are their pain points?

  • What are the strengths and weaknesses of competing solutions?

  • What is the opportunity cost of not buying your product or service?

  • What demographics does your ideal audience fall within?

  • What typical objections do they have?

  • Where do they search for information about products?

  • At what point would your customer buy your product?

Pulling all this information together will give you a good idea of what your solution needs to look like and other essential details about messaging and where to speak to your audience.

Craft your message

Messaging is an essential element of customer acquisition. Research how your prospects think and talk about their pain points. Clearly articulate the unique value your product or service offers to customers. Ensure that your value proposition addresses the identified pain points and is differentiated from competitors.

Choose your customer acquisition channels

Next up, you need to think about customer acquisition channels. In the research phase, you'll already have information about your ideal consumer demographics, including which platforms or channels you should use to get the word out about your product.

Based on your information, identify the most potential marketing channels for reaching your target audience. These may include search engines, social media platforms, online forums, newsletters, online and print magazines, and traditional advertising channels.

Set Clear Goals

Once you have a customer acquisition strategy, you must clearly mark out goals and objectives. Properly set and regularly updated objectives help you to manage your actions and focus on what matters.

What are the essential objectives for your business depend on many factors, such as:

  • Does your revenue come from recurring orders (subscriptions) or one-off purchases?

  • Do you sell online or in-store?

  • What's the value of your average order?

Some of the common customer acquisition KPIs include:

  • Website traffic

  • Conversion rate

  • Customer acquisition cost

  • Average order value

  • Shopping cart abandonment rate

Keep in mind that the purchase paths and conversion points for different products and services can differ enormously. For example, renting a bike is relatively easy for a customer to do on their own, but ordering wedding planning and rental services often requires more in-depth interaction between the customer and the company. Hence there can be a significant difference in their objectives and metrics.

Of course, there are also generic goals and metrics that are industry agnostic, some of which are listed above. Every business probably wants to grow the number of relevant website visitors and optimize website conversion rates. But in summary, when setting objectives and metrics, think about a typical customer journey in the context of your business and set your objectives appropriately.

For deeper dive into KPIs, check out our blogs about e-commerce KPIs and subscription business KPIs.

Choose your customer acquisition strategies

Finding the right customer acquisition strategy for your business is the difference between having orders and sitting around doing nothing. Once you have defined your target audiences and identified where to best reach them, it is time to pick your marketing channels.

In principle, the channels can be much the same as those you use at other stages of your marketing funnel — read the channels where you reach your customers most effectively. The art of customer acquisition comes down to how and when you reach your customers with your communications.

In the following sections, we'll go through some of the most potential customer acquisition strategies you can experiment with.

Paid online advertising

Paid online advertising is one of the most popular and effective ways to gain new customers. It exploded in popularity in recent years because it's cost-effective and capable of precisely targeting users.

paid-ads

Benefits

One of the best things about paid advertising is that it gets near-instant results. Other customer acquisition methods like marketing on social media, SEO, or content marketing take time to bear fruit. At the same time, paid advertising on platforms like Meta and Google can start generating leads and sales on day one.

However, a recent shift towards online privacy and the death of third-party cookies have made targeting users less accurate. Overall, this drop in surgical targeting has led to rises in customer acquisition costs.

Examples

Some examples of paid online advertising are:

  • Meta ads across Facebook, Instagram, or Messenger

  • Google Ads on properties like Google search, Gmail, YouTube, millions of blogs and sites, etc.

  • Banner ads platforms such as Adroll, etc.

Best practices

  • Remarketing and retargeting: Just because it's become more challenging to follow shoppers around the internet and target them with your ads doesn't mean it's impossible. Businesses like Meta and Google still have lots of first-person data that they can use to connect you with your ideal customers who have previously visited your website or engaged with your business in other ways.

  • Always measure and optimize: Track your ads and see how different copy, ad placement, and bidding strategies work.

  • A/B test: Run different copy and ad creatives for a while and promote the ones that produce better results.

  • Automation: Google's Performance Max and Facebook Ads automation can help lower your ad auction bids and get better results while reducing manual work.

  • Bing: With Bing integrating with ChatGPT, it could lead to an upsurge in users. Microsoft has confirmed they'll be supporting it with ads, so don't rule out using it because of the search engine's current relatively lower numbers.

Content marketing

Content marketing serves a variety of functions. It's one of the best customer acquisition channels out there because it can produce great results for relatively low costs.

Content marketing involves creating indirect sales and marketing content to drive awareness, growth, credibility, and authority.

The customer acquisition funnel allows you to serve lots of different content to your audience at the right moment. Remember, the customer journey starts with a need or desire for a solution and moves to considering several competing options before your prospect eventually chooses one. 

You can tailor your content to take advantage of each stage: awareness, consideration, or decision. It's also useful for customer retention, which we'll deal with in more detail in a different article.

search-engine-optimization

Benefits

There are lots of great benefits of content marketing. For starters, it can support your entire customer journey. Additionally, it's relatively low cost. Once you pay for or make the content, it can drive results for years. 

Compared to PPC ads, it has higher click-through rates. Additionally, evidence suggests it's better for lead generation.

Examples

A few good examples of content marketing include the following:

  • How-to guides to boost your authority and customer education

  • Comparisons of different products or services

  • Seasonal content related to your niche

  • Beginner guides to subjects within your sector or industry.

Best practices

  • Teach, don't hard sell: While content marketing is commercial in nature, it stands and falls on being consumable content. Make sure it's helpful

  • Go long, or go home: The general rule is that helpful, comprehensive content ranks better.

  • Promote across channels: Promote your content across different channels, and not just your website. If you have a newsletter, a Facebook page, LinkedIn, or a community, share it there.

  • Use your employees: Boost your reach by asking your employees to promote your content on their personal accounts from time to time.

Social media marketing

Social media marketing comes in a variety of different flavors. You can do it organically and grow your followers through content and engagement or pay for ads on channels your audience uses.

As we've already discussed using paid marketing above, let's focus on the social elements.

Social media marketing is a proven method of using social platforms and networks to market your products and services. You can use it to connect with users, gather first-party data, deliver important marketing messaging, and drive sales and leads.

One of the most critical parts of social media marketing is establishing a presence and a community. Get this right, and you can attract and convert users.

Benefits

The significant benefit of social media marketing is reach. With over 4.5 billion people active on social media, there is no better place to connect with your audience both locally and globally.

But it's not just about the sheer volume of potential customers you can access that meet on social media, making it a great customer acquisition channel. It's also about the way that you can find followers for even the most narrow niches with the right techniques.

Examples

Examples of social media marketing include:

  • Posting regularly from your company account

  • Responding to @'s or mentions about your company

  • Running online competitions or surveys

  • Starting an online community for your brand.

Best practices

  • Tone: Get the tone right and make sure it matches your brand.

  • Strategize: Don't just start randomly posting and expect something to happen. Make a plan.

  • Analytics: Use analytics to measure the effectiveness of your social media marketing

  • First-party data: Social media marketing allows you to collect precious first-party data, which you can then use to target users with paid ads or email campaigns

Influencer marketing

Influencer marketing is a great way to improve customer acquisition. While it can be expensive, you don't need to pay $1 million for Kim Kardashian to promote your brand. There are lots of options for different types and sizes of companies.

Influencer marketing is like a 21st-century version of word of mouth. Customers develop relationships with content creators of different kinds. You can leverage these relationships by rewarding these influencers to promote or recommend your product.

The other thing to consider for people with small and local businesses is that micro and nano influencers can effectively promote your brand. While their reach is not as high as that of public figures, their impact on their followers can often be greater. So figure out who can potentially bring the best return on investment.

influencer-marketing

Benefits

The benefits of influencer marketing are that it's a way to reach a large, potentially interested audience. Getting the alignment between product and influencer right can significantly boost your sales and revenue.

The main thing to remember here is finding the right fit. If you have a baby clothing rental business, partnering with influencers whose audience consists of people in their 25-40s makes more sense than partnering with influencers whose audience consists of 12-18-year-olds. So find someone whose audience is primarily made up of your ideal demographic.

Examples

Some examples of influencer marketing are:

  • Paying internet celebrities to post about your products on social media

  • Ads within podcasts or YouTube videos

  • Product reviews on relevant channels

Best practices

  • Research the influencer: Remember, any partnership reflects on your brand. If you choose an influencer, ensure they're not someone who promotes anything or is likely to say something unwise or controversial that will hurt your brand

  • Connect with the right audience: Look at your ideal customer demographics. Pick an influencer whose audience is similar to your ideal customer profile.

  • You don't always have to write a check: While most influencer relationships involve payment, there is a growing movement towards lining up with people who "actually use this product." Sometimes, giving them free products or access to your service is enough.

Search engine optimization (SEO)

Search engine optimization (SEO) is one of the most tried and true methods of acquiring customers. When users enter keywords into search engines, they are considered high intent. What this means is that they are interested in a product.

Compared to a tv or radio ad or billboard, this is a totally different ball game because you know the people you are reaching are at a higher level of interest.

SEO describes various techniques businesses use to match their offering with users' search engine intent. If users are looking for "children's clothes," you can use different terms on your website that direct them toward the product they want.

SEO works on both your website and as part of your broader content marketing. The crux of it is about answering users' questions in the most helpful way possible.

You can use SEO marketing as an organic marketing channel for customer acquisition or bid for keywords as part of a pay-per-click campaign on Google and other search engines.

local-pack

Benefits

One of the most compelling benefits of SEO is that once you invest initial money in your website, it can continue to bring a steady stream of customers to your business for years without requiring the sort of investment of PPC ads or traditional media.

Examples

Some good examples of getting started with SEO include:

  • Optimizing your website for speed and user experience.

  • Starting a blog focusing on your customers' problems your products and services can solve.

  • Setting up a Google Business Profile. It is particularly important for local SEO not only because it's one of the most important ranking factors on local searches but also because it will give your business a presence on Google Maps.

  • Guest blogging on other sites.

  • Offering and getting your insights published in online magazines.

Best practices

  • Research is key: You must know how consumers think and talk about your product or service. There are lots of free and paid keyword research tools out there that can help you do the job.

  • Content is about more than keywords: Google releases updates to how it ranks content. Over the last few years, they've discussed the importance of good and comprehensive content rather than keyword-driven work.

  • Answer questions: If you want your articles to rank well, they need to answer questions your audience has.

  • Think about different stages of the buyer's journey: The search terms and questions users have at different points of the buying journey can be pretty varied. If someone is looking for information, they'll use distinct phrases from a customer who is ready to buy. Cater for both, but remember whether your content is there to build awareness, serve consideration, or push users to make a decision.

Email marketing

Email doesn't have the glitz and glam of other types of outreach. However, it has the numbers to back it up; it still produces the best ROI of all marketing efforts, with about $36 return for every $1 you spend.

Email marketing is one of the best ways to take advantage of your marketing list. You can collect this information in various ways, from social media to landing pages and customer lists. From there, you can send out emails that help sell or promote your offering.

email-marketing

Benefits

There are benefits to email marketing as a customer acquisition strategy. You can send information about offers, discounts, seasonal campaigns, and guides to encourage people to make a purchase or sign up for a subscription. As we mentioned above, it has a high ROI because it's low-cost. Finally, it's highly automated, so you can sell while you sleep.

Best practices

  • Segment your audience: Send different emails to customers at different stages of the buyer's journey or with significantly distinct reasons for using your product or service.

  • Automate: Email marketing automation is scalable and saves time.

  • Opt-in: Make it easy for users to opt-in or out of your campaigns.

  • No spam: Spam detectors are very sophisticated these days. So ensure your emails don't use clickbait or misleading headlines to bump up your open rates, or your emails might never even reach your user's inbox.

Website optimization

Website optimization is another under-talked-about customer acquisition strategy. While optimizing your content for search engines is well understood, a lot goes into user experience (UX) and user interface (UI) that removes friction so that you can make it easy for your potential customers to sign up for your service.

Web optimization covers a broad range of activities like improving page speed, planning your website structure, optimizing keywords, and more. It also involves experimenting with different layouts, copy, and creatives to boost conversion rates for website visitors.

Benefits

Your website is like the front of your shop. It will fill your customers with confidence if it looks clean, legit, and professional. Additionally, if you run ads or other kinds of promotions, you need somewhere to direct your users. 

A solid website gives you legitimacy. Additionally, it's another opportunity to convince users to use your service instead of your rivals.

Best practices

  • User experience: User experience is very important when designing a website. So use best practices and lots of testing to ensure you can convert visitors. 

  • Reduce bounce rates: Technical elements of your website can influence SEO. Get page loading as quickly as possible to ensure you're not penalized by search engines.

  • Experiment: Don't be afraid to experiment with different setups and see which delivers the best results.

  • Optimize copy: Speak the same language on your website as your customers. One important area for optimization is your product page copywriting.

  • Use high-quality images: Never underestimate the role of crisp visuals in e-commerce. We have covered the best practices for product photography in a separate article.

Traditional Advertising

Traditional advertising still has a lot of power. Sure, it can be expensive, but you don't need to buy space at Super Bowl halftime to make an impact. One of the reasons why digital advertising has grown so exponentially over the last few years is because it is measurable. However, several attribution models can pinpoint the exact ad that caused your ad to make a sale.

While traditional forms of advertising don't have the same surgical targeting abilities, methods like mixed market modeling (MMM) can identify ads' effectiveness.

Traditional ads are adverts run on TV, radio, and in newspapers. They can be more expensive than digital or other kinds of ads. Additionally, they can also cater to different demographics. Depending on your product or service, this could be an advantage or disadvantage.

traditional-marketing

Benefits

One of the big benefits of using a traditional marketing campaign is prestige. Nothing screams big time like renting a billboard space. Additionally, many customers have banner blindness or ad blockers, which can reduce the effectiveness of digital ads.

Due to competition with digital ads, traditional ads are decreasing in price.

Examples

Some examples of traditional marketing are:

  • Print media ads

  • Television spots

  • Radio advertisement

  • Roadside billboards

Best practices

  • Go local: Big stations or publications carry big fees. But by going local, you can find lots of value. This situation is particularly sensible if your rental or subscription draws on a local marketplace.

  • Consider upfront costs: Upfront costs are one of the most significant considerations when running traditional ads. Stations and publications want payment upfront, which isn't possible for every business. So it might not be your best choice unless you're flush with funds.

Referral programs

Referral programs pay or reward your existing customers for getting the word out about your product or service. For example, you can incentivize your current customers with a prize or discount if they recommend a friend.

Word-of-mouth recommendation is compelling. People are likely to commit if a friend vouches for a product or service. While that recommendation is slightly compromised when incentivizing one party, it's still highly credible.

Benefits

One of the most significant benefits of referrals is their cost-effectiveness. In an era of information overload, product recommendations and word-of-mouth (WOM) are some of the most influential factors in purchasing decisions. If you're not convinced, take a look at this blog post compiled by Semrush on WOM-related statistics.

Examples

Examples of referral programs are things like:

  • Prizes or bonuses for recommending a product to a friend

  • Run affiliate programs

  • Social gifting

  • Loyalty campaigns

Best practices

  • Make it worthwhile: If you want to make your customers get the word out, make the rewards worth it.

  • Value is important: Even if the rewards are significant, the best way to make your customers recommend you to their network is by providing so much value they'd vouch for you without an incentive.

Live events

Live events can be a great way to get the word out about your product or service. You can either host one yourself or join a conference or roadshow to connect with customers.

Live events are a more traditional type of customer acquisition strategy. They involve putting on live shows to demonstrate your product or service.

sales-exhibition

Benefits

The benefits of live events are face-to-face experiences. For particular goods or services, nothing beats holding them in your hands, using them, testing them, etc.

Examples

  • Trade shows or exhibitions

  • Product launch parties

  • Conferences and webinars.

Best practices

  • Go hybrid: While online events were all the rage during COVID-19, live events have surged back in popularity. However, many people have questions about the environmental sustainability of live events, especially those related to traveling. So, if you are putting together an event, at minimum, offer a hybrid model where people can also participate online. Additionally, minimize the amount of waste, and aim to recycle and reuse materials.

  • Provide better experiences: Again, trends suggest that people are far pickier about what events they attend. So put a lot of effort into creating excellent experiences for your attendees.

  • Think about networking: Give a lot of space for things like networking. Attendees missed face-to-face interactions during the lockdown, so emphasize those elements to maximize success.

  • First-party data collection: Again, use these events as a way to capture first-party data.

How to improve your customer acquisition strategy further

Follow the steps we've listed, and you'll have the bones of a great customer acquisition strategy. However, there is always more to do. Perhaps the most important part is continuous testing to help you optimize your methods.

Test and iterate different strategies

Specific strategies will jump out at you during the planning and research stage. However, while there are approaches that will initially seem most sensible, it's essential to keep an open mind and experiment.

Run trials and tests on different strategies and see how they do. For example, mix up content marketing and SEO with social media marketing and PPC ads. See what sort of ROI and ROAS you get from each approach.

Collect and analyze data

As always, collecting and analyzing data is the most critical thing that you can do. Having a gut feeling about what's working is good, but nothing replicates the cold facts of hard numbers.

As we've recommended above, look at customer acquisitions and retention tactics. Look at what numbers each segment does. For example, a specific demographic might produce the most revenue or lifetime value. Keep an eye out for any trends that emerge from your measurements so that you're ready to capitalize.

Double down on what works

Collecting data means you'll know what works — and what doesn't. Testing a few different strategies will allow you to know what works for your business. Which customers are most valuable? Which channels produce the best results? Where are conversion rates the highest? 

Continuously ask yourself questions, and when you emerge with the answers, ensure you direct your funding towards what is proven to work. As we mentioned above, don't be too rigid or scared to experiment.

Barely anyone has an unlimited marketing budget. Spending yours wisely will keep you in the game for longer.

The work does not end with customer acquisition

Customer acquisition is such a huge part of running a successful business that it can be easy to focus excessively on this area. However, spending big and mashing new customers into a company that is not delivering value or functioning well won't work.

Finding customers is essential, but keeping them is what separates winners from losers. Customer retention should be valued as highly as acquiring new customers, but remember that you shouldn't distinguish these two processes as they have a complementary effect.

Always ask questions or explore the reasons why you are losing customers. It could be down to pricing, quality, a lack of value, your rivals, etc. Whatever it is, identify and remedy it before trying to capture lost revenue through new customers.

If your business is leaky, you'll just be scaling up your losses.

Final thoughts

Customer acquisition is central to any strategy you employ. You can't get off the ground without a way to bring in new customers who buy, rent, or subscribe to your products. 

Low interest rates over the last few years saw some businesses develop bad habits. With VC funding flowing freely, many companies found that the best way to win in the market was to outspend their rivals with aggressive marketing, even if they lost money overall.

While the survival of these businesses suggests this strategy is not without merits, it relies on burning through a tremendous amount of capital. With high inflation, rising customer acquisition costs, and a rise in interest rates, tearing through that amount of money is no longer sustainable.

All that said, some level of customer churn is inevitable. Thus, you have to put effort into winning new customers, and that's what customer acquisition is ultimately about. Combining effective customer acquisition with retention and customer loyalty strategies is a winning recipe.

Finally, one underappreciated element of customer acquisition is finding the right customers. Aggressive marketing can help you win sheer numbers, but to pump up the overall customer lifetime value, you need to make them come back. Trialing with a subscription model can be worthwhile as the model has retention and long-relationships baked in.

Focus on acquiring the customer that needs your product. Work hard to retain them by continuously providing value. In an ideal world, you can create a customer flywheel feeding your growth where your customers become loyal and vocal advocates for your products. When paired with a referral program, you'll have a self-sustaining way of acquiring new customers that scales easily.

Article written by Akseli L.

A marketer who gets excited about all things e-commerce. Outside of office hours, you'll most likely find Akseli from the countryside, hiking and shooting landscapes.

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